DOE Report on Improving Fuel Economy Decisions

The Department of Energy has a comprehensive August 2009 draft report available for the public entitled:

Reducing Oil Use and CO2 Emissions by Informing Consumers’ Fuel Economy Decisions: The Role for Clean Cities
A Discussion Paper for Clean Cities Coalitions and Stakeholders to Develop Strategies for the Future

The authors describe the fact that consumers are confused about the relationship between fuel economy (miles per gallon) and fuel consumption (gallons per mile), which leads to inaccurate assessments of the value of fuel economy.

Later in the report (pages 15-16), they note that

Another apparent source of confusion is a consequence of reporting fuel economy in miles per gallon rather than fuel consumption in gallons per 100 miles. Research has shown that many consumers perceive the value of an increase in 10 MPG from 40 to 50 MPG to be equal to a 10 MPG increase from 20 to 30 MPG. In fact, the increase from 40 to 50 MPG reduces fuel consumption by 0.50 gallons per 100 miles while an increase from 20 to 30 reduces fuel consumption by 1.67 gallons per 100 miles. For a vehicle traveling 10,000 miles and gasoline at $2.50 per gallon, the difference in annual fuel savings is almost $300. The fueleconomy.gov website provides the option to view fuel economy estimates in terms of miles per gallon, gallons per 100 miles or liters per 100 kilometers. However, this facility is little used by visitors to the website. Additional market research may lead to better strategies for helping consumers understand this important distinction.

We agree that consumers will generally not select "gallons per 100 miles" on their own--although some may have heard about the problems with MPG comparisons, the vast majority have not.

That's why in an earlier post we recommended the following for the fueleconomy.gov website and the Fuel Economy Guide run by the EPA, DOE, and EERE:

First, there are two things that the EPA and DOE do not need to do. First, you do not need to explain the MPG Illusion to car buyers, which may not be of interest to many consumers. Second, you do not need to use the acronym “GPM,” which may strike some consumers as unnecessary.

What the EPA and EERE should consider doing is the following:

1) Emphasize clearly on the opening page of the fueleconomy.gov website (and in the Fuel Economy Guide) that consumers should compare the gas consumption of cars, not MPG. Almost all consumers will care about gas consumption. It needs no further justification.

2) Provide consumers with a salient, immediate measure of gas consumption when they examine cars. The measure could be gallons per 100 miles or gallons per 10,000 miles. It could be displayed as a column of data in the Fuel Economy Guide and could be exhibited next to MPG in the car comparison windows on the fueleconomy.gov.

Both USA Today and Popular Mechanics have started using the "gallons per 100 miles" measure.

Currently fueleconomy.gov offers a "gallons per 25 miles" measure automatically (see below).


The logic for choosing this distance is that it is a typical daily drive. Jack Soll and Dan Feiler have pointed out that this number may be useful for daily driving decisions (whether to make a trip or not). The problem with this measure, however, is at the time of the car purchase decision. It makes all gas consumption numbers look small and similar (.5 vs .64 vs 1.04). At the time of a car purchase, a longer distance is more realistic and makes differences between cars clearer.

In other research, my coauthors and I have shown that expanded scales lead consumers to use that dimension more in their decision. The more expanded the scale the more weight people give it in their decision making. In this case, gallons per 25 miles is a contracted scale and gallons per 100 miles (or gallons per 10,000 miles) is expanded. For example, the numbers in the screenshot above translate to:

MPG	GPHM	GP10K
50	.5	200
39	.64	256
24	1.04	417

We think that car buyers would be served best by gallons per 10,000 miles. This could be listed at fueleconomy.gov, on car stickers, in Consumer Reports, etc. Offering gallons per 10,000 miles during the car purchase decision would:

1) give buyers a more accurate understanding of fuel savings (compared to MPG) and

2) make buyers more sensitive to the benefits of fuel savings (compared to gallons per 25 miles).

Ask Marilynn

From Ask Marilynn's Sunday Column - September 20, 2009

"Jack drives a gas-guzzling SUV 15,000 miles a year. It averages 10 mpg. His wife Jill drives an economy car the same distance. It gets 30 mpg. The couple wants to use less gasoline. They can afford to trade Jack’s clunker for an SUV that gets 13 mpg or trade Jill’s sensible car for a hybrid that gets 60 mpg.

Which trade would save the most gasoline?
—Michael McClendon, Austin, Tex.

Test your intuition before doing the math. Look at the choices and make an educated guess about what makes the most sense. The answer appears at the end of the column"

When Consumer Reports Does Math...

The author of Hybrid Car Review spotted a great example of poor MPG math from the people who have the knowledge and power to do better. (See more analysis at ecommoder or the comments at autobloggreen, too.) Here is the post:

"It's stories and quotes like this that prove the point that some have been making about switching from mpg to gallons per mile (gpm).

Consumer Reports

The Honda Insight hybrid showed the largest drop in fuel economy—over 15 mpg going from 55 to 75 mph
...
Vehicles with lower fuel efficiency had the smallest drop. The V8-powered Mercury Mountaineer has a fuel economy of 23.8 mpg at 55 mph and that drops to 21.2 mpg at 65 and 17.8 at 75 mph..

That is just so misleading. In gallons per mile, the Insight drops from 1.93 gallons per 100 miles to 2.74 gpm. That's a difference of 0.81 gpm. The Mountaineer drops from 4.20 gpm to 5.62 gpm, a difference of 1.42 gpm.

So not only are starting off at twice the inefficiency, you end up losing almost twice as much.

This is exactly the misleading nonsense a switch from mpg to gpm would fix."

Seconded.

PS, recommended math materials

Gallons Per Mile Teaching Materials

Claudia Bode at the University of Kansas and colleagues have put together an extensive, well-designed set of teaching materials to help students see the problems with "miles per gallon" and gain insights from "gallons per mile."

These materials are free to the public. They include both online pages and downloadable pdfs. The materials cover a wide range of topics on fuel efficiency, including the issue of driving speed.

Here are the two links to www.sciencecases.org:

http://sciencecases.lib.buffalo.edu/cs/collection/detail.asp?case_id=389&id=389

Here is a link to teaching materials we prepared in early 2009.

MPG Improvements from Cash for Clunkers - A GPM Analysis of the CO2 Reduction

The Cash for Clunkers (CFC) program has not just been popular. It has also been effective. It has helped the auto industry. And it has reduced CO2 emissions.

Let's look at the DOT numbers released on August 3:

Vehicles traded in under the program averaged 15.8 miles per gallon, compared with 25.4 miles per gallon for the new purchases, or a 61 percent improvement, according to the Transportation Department data.

Let's translate this into gas saved and CO2 emissions reduced.

A 60% increase in MPG translates to a 37% reduction in gas consumption holding constant the number of cars and the miles driven. (The math is .6/1.6 and is explained at this post.)

Holding constant the number of cars is a reasonable assumption: These are trade ins that work one-for-one.

Holding constant the miles driven is a more problematic assumption. More fuel efficient cars make it cheaper to drive and people may drive further. Economists call this effect a "rebound" effect (which is an example of a "moral hazard"). How large is the rebound effect? The reality is that most people drive the distance they need--to work, to school, etc--without much opporunity for discretionary driving (The exceptions? "Sunday drives;" vacations that wouldn't have been taken; travel made in a car that would have been taken in a plane). MIT Technology Review reports numbers that the rebound effect is about 20%--for every 10% increase in fuel efficiency, drivers wipe out 2% by driving further. The best guess is that rebound effects are small. It is not clear whether CFC purchasers will be different.

Let's look at the gas savings created by replacing a fleet that has an average MPG of 15.8 with a fleet that has an average MPG of 25.4 using gallons per 100 miles:

100/15.8 = 6.33 gallons per 100 miles
100/25.4 = 3.94 gallons per 100 miles

That's a savings of 2.4 gallons per 100 miles. If we take into account a rebound effect, that might reduce the net gas savings to roughly 2 gallons per 100 miles.

A gallon of gas releases about 20 pounds of carbon dioxide when burned. (In fact, Aaron Seigel has emailed me that the real emissions are closer to 25 pounds because gasoline manufacturing emits carbon--so, a gallon saved eliminates this carbon, too.) Twenty pounds of CO2 translates to one ton of CO2 in 10,000 miles of driving. This improvement alone saves 2 tons of carbon dioxide every 10,000 miles of driving that it replaces in the old vehicle. That is a valuable savings.

However, the new vehicle released carbon dioxide as it was made: About 7 tons of carbon. This figure includes materials and manufacturing. (The actual estimates, from the ACEEE, range between 3 and 12 tons.) Do the gas savings need to repay this carbon "debt"? Arguably, the carbon debt is sunk for cars already sitting on lots. However, because cars are also being destroyed, it is more conservative to assume that selling existing cars is accelerating the manufacture and purchase of soon-to-be-made cars--when the lots are empty, new cars will be built that wouldn't have been built otherwise. Thus, we need to "charge" the cars on the lot with some carbon debt. Let's be conservative and use 7 tons of carbon as the debt.

How much gas needs to be saved to cover the carbon debt?

We have shown in earlier posts (here and here) that saving 2 gallons per hundred miles "pays back" the carbon used to make the new car in about 35,000 miles of driving, which is a reasonable payback time (and modeled on the standard proposed by Bill Chameides, Dean of Duke's Nicholas School). Every additional mile driven in the new car in place of the old car beyond 35,000 miles yields a net reduction in CO2 emissions.

What if the clunker was truly a junker and wouldn't have lasted 35,000 more miles? In the extreme, what if the junker couldn't go another mile? Then the key comparison is to the new car that "would have been" purchased without the CFC requirement of an MPG improvement. For these situations, the carbon dioxide released manufacturing the new car was inevitable, and the relevant factor is the difference between the MPG of the car bought under CFC and the MPG of the car that "would have been bought" otherwise. Edmunds reports that trade ins of comparable cars yields a 5 mpg improvement on average, well-below the 9 MPG increase observed in the CFC trade ins. (Edmunds does not try to adjust for any self-selection of types of buyers who are taking advantage of this program (e.g., eco-minded buyers who were going to buy a higher MPG car anyway).) For trade ins of junkers, CFC has helped reduce CO2 emissions if the CFC trade in improves on the MPG of the car that "would have been bought."

In these earlier posts, we had proposed that "2 GPHM" be the minimum gas savings allowable in a CFC trade in, thereby ensuring that new cars cover the emissions from their production. The original Feinstein/Collins/Irael bill called for efficiency gains that would have met this standard. However, the final June bill had MPG improvements that fell far short of saving 2 gallons per hundred miles. If car buyers had simply met the minimum MPG improvements in the final bill, the program would have failed as a CO2 reduction policy.

The good news--the great news--is that car buyers have been happy to ditch their inefficient vehicles (60% of those traded in have been trucks and SUVS) for much more efficient vehicles that have yielded significant savings in gas. Here is a link to the top 10 sellers, listed with gallons per 100 miles. Thus, Feinstein and Collins have praised what car buyers have done with this opportunity and are supporting the extension.

The bottom line: CO2 has been reduced. This new fleet will cover its own carbon debt as long as it replaces 35,000 miles that would have been driven in the old vehicles. If the old car would not have made it 35,000 miles, CO2 has been reduced if CFC has encouraged car buyers to improve their MPG by more than they would have without the voucher.

Car Dealers, Car Buyers, and Cash for Clunkers July 24 2009

To find out whether your car qualifies for a Cash for Clunkers rebate and to explore new car options, use this fueleconomy.gov website: http://www.fueleconomy.gov/feg/CarsSearchIntro.shtml

The fueleconomy.gov website will tell you the voucher value of a trade in. However, it does not tell you the value of your gas savings. This post focuses on the value of the gas savings from a Cash for Clunkers trade in.

Car buyers: The gas savings from your trade in can be more valuable than the voucher itself. MPG is a misleading indicator of gas savings: Replacing a 14 MPG car with a 25 MPG car will save more gas than any possible improvement to a 33 MPG car (for example, 300 gallons over 10,000 miles of driving).

Car dealers: We encourage you to have "GPM" tools available for car buyers when they trade in their Clunkers so that car buyers can see their gas (and cost) savings.

The GPM tools on this website will give you an accurate picture of the gas savings from a Cash for Clunkers trade in. Here are 3 tools that help calculate gas savings:

1) The GPM calculator, www.gpmcalculator.com, will let you choose different levels of MPG (or specific cars) and compare the gas consumption of those vehicles for a distance of your choice (100 miles, 12,000 miles, 100,000 miles).

2) The following table let's you quickly compare the gas consumption (gallons per 100 miles) and gas cost savings (over 10,000 miles). The table assumes that gas is $2.50 a gallon. (To see the effect of different gas prices, use the GPM calculator above.) Click here for a downloadable pdf.

MPG	Gallons per 100 Miles	Gas Costs to Drive 10,000 Miles
10	10.0	$2,500
11	9.1	$2,273
12	8.3	$2,083
13	7.7	$1,923
14	7.1	$1,786
15	6.7	$1,667
16	6.3	$1,563
17	5.9	$1,471
18	5.6	$1,389
19	5.3	$1,316
20	5.0	$1,250
21	4.8	$1,190
22	4.5	$1,136
23	4.3	$1,087
24	4.2	$1,042
25	4.0	$1,000
26	3.8	$962
27	3.7	$926
28	3.6	$893
29	3.4	$862
30	3.3	$833
31	3.2	$806
32	3.1	$781
33	3.0	$758
34	2.9	$735
35	2.9	$714
36	2.8	$694
37	2.7	$676
38	2.6	$658
39	2.6	$641
40	2.5	$625
41	2.4	$610
42	2.4	$595
43	2.3	$581
44	2.3	$568
45	2.2	$556
46	2.2	$543
47	2.1	$532
48	2.1	$521
49	2.0	$510
50	2.0	$500

3) This document contains two tables that directly calculate the gas (page 1) and cost (page 2) savings of different trade ins. Look in the top row for the MPG of your original vehicle; look in the left side column for the MPG of a new vehicle. Table 2 assumes that gas is $2.50 a gallon. (To see the effect of different gas prices, use the GPM calculator above.)

[The Sierra Club and the American Council for an Energy-Efficienct Economy have developed an online gas savings calculator similar to these tables. You can find it here. It assumes 2 possible prices of gas--current and $4 per gallon.]

WYPR Midday with Dan Rodricks: Cash for Clunkers and GPHM

Dan Rodricks of WYPR in Baltimore reviewed the details and merits of the Cash for Clunkers program on his July 27 broadcast. He invited me to join him to talk about the implications of "Gallons per Mile" for Cash for Clunkers. Here's the link to the broadcast.

In a nutshell:

1) Gallons per mile makes clear that national policy should focus on improving the fuel efficiency of the most inefficient cars, suvs, and trucks. The following table shows the gas consumption (per 100 miles) for different levels of mpg:

10 mpg = 10 gallons per 100 miles (gphm)
11 mpg = 9 gphm
12.5 mpg = 8 gphm
14 mpg = 7 gphm
16.5 mpg= 6 gphm
20 mpg = 5 gphm
25 mpg = 4 gphm
33 mpg = 3 gphm
50 mpg = 2 gphm

Thus, improvements of even 1 or 2 mpg in the "teens" can save about a gallon every 100 miles. That translates to 100 gallons every 10,000 miles, or one ton of carbon. That is the same amount of gas (and carbon) saved by replacing a 33 mpg car with a 50 mpg car. In fact, replacing a 14 mpg car with a 25 mpg car saves more gas (3 gallons per 100 miles) than any possible improvement on a 33 mpg car.

Cash for Clunkers makes sense because it focuses on cars in the "teens".

2) GPM helps car buyers see the true value of a Cash for Clunkers trade in. The voucher is only half the story; the other half is the value of the gas savings. Thus, GPM tools, like the GPM calculator at www.gpmcalculator.com, are essential for car dealers and car buyers during the trade in process: Know your gas savings!

3) And, in the long term, any number of policy decisions would be easier if the country adopted "gallons per hundred miles" (GPHM) to talk about fuel economy. Why? The things we care about as a country--carbon emissions, gas consumption, and personal gas costs--are a direct function of "GPHM", but not of MPG. It's as simple as: GPM can be subtracted to know gas savings; MPG cannot.

The CAFE increases in the spring were misinterpreted at times because major news outlets translated "mileage increases" directly to carbon reduction.

If you are interested in trading in a car in the Cash for Clunkers program, be sure to check the size and value of your gas savings at this post. The gas savings can be worth as much as the voucher.

Cash for Clunkers has yielded a 69% increase in MPG?

[If you are interested in trading in a car in the Cash for Clunkers program, be sure to check the size and value of your gas savings at this post. The gas savings can be worth as much as the voucher. DOT has released more detailed numbers about cars sold and bought, and this August 5 post analyzes the benefits so far of Cash for Clunkers.]

There is a story that has received a lot of attention in the last 2 days stating that early trade ins in the Cash for Clunkers program have reaped a 69% improvement over the original "clunker."

Here's the press release: http://www.webwire.com/ViewPressRel.asp?aId=100063

It's an encouraging number if true. (Of course, in terms of reduction in gas consumption, the percentage translates to 40% as spelled out here.)

However, until the organization produces more concrete numbers, we have to worry that they took straight averages of MPG across vehicles without actually calculating the harmonic mean, i.e., converting all cars to GPM before MPG, as done in the CAFE calculations.

Why does it matter? Let's create a simple scenario:

• The average clunker trade in gets 16mpg
• The average new vehicle gets 27mpg

11 divided by 16 represents a 69% increase over the original MPG. Let's assume two 16 MPG cars were turned in, one for a 20 MPG car and the other for a 34 MPG car. The average MPG appears to be 27 MPG. However, the actual MPG of the two new cars is 2/(1/20 + 1/34), or 25 MPG. A good improvement, but not a 69% improvement; it's a 56% improvement.

The harmonic mean keeps very efficient cars from incorrectly inflating the overall MPG.

Popular Mechanics Adds GPHM

Popular Mechanics has joined USA Today in offering gallons per hundred miles (GPHM) in its car reviews. Popular Mechanics included g/100m as one of "25 Bold Ideas" in their July issue.

The July 16 post ends, "The difference in the mpg ratings doesn't reflect the actual difference in fuel consumption the way that gallons/100 miles does, pure and simple. And that's why PM is starting to report fuel economy this way on its recent test drives. Pointedly, the EPA should promote this system too. Sure, it's trivial to calculate the difference, but with the current emphasis that car manufacturers, government agencies and consumers are placing on fuel economy, we need to change our way of thinking from high mileage to low consumption. "

If you are interested in learning more about gas savings from a trade in, please go to this May 29 post.

The Final Cash for Clunkers Bill, June 2009

The Final Bill

A final bill has passed both houses. Here is the official government site for details (from the NHTSA): http://www.cars.gov

[Updated: Here's an analysis of how the program is doing as of August 6.]

If you are considering trading in a car, carefully examine the gas cost savings as well as the voucher. Gas savings are better seen using "Gallons per Hundred Miles" (GPHM) than using MPG. In the table below, note that a 14 to 25 MPG trade in saves 3 gallons of gas every 100 miles, or 300 gallons every 10,000 miles. That's about $3,500 in savings in just 40,000 miles of driving. This post gives you multiple tools for calculating the gas savings of a trade in. The value of the gas savings can be as large as the value of the voucher.

MPG	GPHM
10	10
11	9
12.5	8
14	7
16.5	6
20	5
25	4
33	3
50	2
100	1

Thoughts on the Final Bill

The final bill has decent MPG improvements for cars (4 MPG and 10 MPG)--enough to "payback" the carbon released in producing the car--but not for large light duty trucks. We believe a tiered system based on GPM and requiring larger gas savings would have been better for reducing CO2 emissions.

However, if people go beyond the minimum MPG improvements when they make a trade in, that will make the program effective in reducing CO2 emissions.

25 Bold Ideas in Popular Mechanics July 2009 (the EPA waits.....)

G/100M is one of the 25 Bold Ideas.

Here is a post explaining why PM will use "GPHM" as a standard part of their car reviews in the future.

The idea has been adopted by USA Today but only partially by the EPA. The fueleconomy.gov site (run by the EPA and DOE) offers g/100m... if you know to look for it. Unfortunately, most of the site dances around gas consumption and never lands on it squarely. For example, the site has a good gas payback calculator here:

http://www.fueleconomy.gov/feg/savemoney.shtml

But, the calculator doesn't tell you your gas consumption.

You have the option to pick gallons per 100 miles when selecting and comparing specific cars here: http://www.fueleconomy.gov/feg/sbs.htm ....if you know where to look (it moves around across different pages). However, nothing on the site explains why you'd want to switch to g/100m.

The site does provide one GPM measure with every car description: Gallons per 25 miles. But this is a poor measure because all cars look pretty much the same on the scale. Larger scales make differences clearer (see Burson, Larrick, & Lynch, 2009, Psychological Science). We encourage the EPA and DOE to make g/100m more available to car buyers.

GPHM Table to see Gas Savings on Trade Ins (Including Cash for Clunkers)

[Update June 10: There are two personal benefits from Cash for Clunkers. One is the voucher. That one's clear. But the other benefit is the dollar value of the gas savings that result from a trade in. That one is less obvious because gas savings are a not a one-to-one function of MPG increases.

In many cases--especially for very inefficient cars--the savings in gas costs will be larger than the rebate. In that sense, the gas savings can be thought of as a kind of "matching" program for the voucher. It doubles the value of the voucher.]

The table below shows how different levels of Miles per Gallon (MPG) translate to Gallons per Hundred Miles (GPHM). You can easily calculate the gas savings from a trade in by subtracting the new GPHM from the old one. For example, trading in a 17 MPG car for a 28 MPG car saves 5.9 minus 3.6 = 2.3 gallons per hundred miles. That saves more than 200 gallons of gas (and $500) over 10,000 miles of driving. It also saves 2 tons of CO2 emissions over that distance. The gas cost calculations below assume that gas costs $2.50 per gallon.

Here is a downloadable version of the table below.

These tables directly caclulate the gas and cost savings of trading in a car that gets 18 MPG or less for different combinations of cars with higher MPG.

Finally, this online calculator will let you compare gas consumption and gas costs for any combination of MPG, driving distance, and gas price. It also allows you to calculate gas consumption and cost information on 2009 cars.

MPG	Gallons per 100 Miles	Gas Costs to Drive 10,000 Miles
10	10.0	$2,500
11	9.1	$2,273
12	8.3	$2,083
13	7.7	$1,923
14	7.1	$1,786
15	6.7	$1,667
16	6.3	$1,563
17	5.9	$1,471
18	5.6	$1,389
19	5.3	$1,316
20	5.0	$1,250
21	4.8	$1,190
22	4.5	$1,136
23	4.3	$1,087
24	4.2	$1,042
25	4.0	$1,000
26	3.8	$962
27	3.7	$926
28	3.6	$893
29	3.4	$862
30	3.3	$833
31	3.2	$806
32	3.1	$781
33	3.0	$758
34	2.9	$735
35	2.9	$714
36	2.8	$694
37	2.7	$676
38	2.6	$658
39	2.6	$641
40	2.5	$625
41	2.4	$610
42	2.4	$595
43	2.3	$581
44	2.3	$568
45	2.2	$556
46	2.2	$543
47	2.1	$532
48	2.1	$521
49	2.0	$510
50	2.0	$500